The contribution of international financial reporting standards to reducing tax evasion

Abstract

In Europe, taxation is a critical issue, resulting in state mechanisms constantly striving to reduce levels of tax evasion. This research focuses on the contribution of International Financial Reporting Standards (IFRS) to reducing tax evasion by examining how transparency, standardization and digitalization of accounting processes enhance tax compliance, as well as the challenges that shape a new framework. Methodologically, it is based on secondary research, using reputable sources from the last five years (2020–2025). At the contribution level, it provides a synthesized scientific analysis identifying key mechanisms between IFRS and tax evasion, incorporating recent data and proposing policies to enhance transparency and harmonize accounting and tax systems. The findings showed that IFRS reduce tax evasion through standardized reporting and enhanced transparency, particularly through the implementation of the IFRS 7 and IFRS 15. Additionally, the results showed that digitalization enhances tax compliance, while the complexity of IFRS and the lack of harmonization with national tax systems are contemporary challenges.